The former chief executive officer of Brazilian petrochemical giant Braskem SA pleaded guilty on Thursday to charges stemming from his role in a scheme to divert $250 million of company money into a slush fund.
José Carlos Grubisich pleaded guilty in a Brooklyn, N.Y., federal court to two counts of conspiring to violate the U.S. Foreign Corrupt Practices Act. The charges, which stem from a far-reaching corruption investigation in Brazil known as Operation Car Wash, carry a maximum sentence of 10 years, District Court Judge Raymond Dearie said. Mr. Grubisich, who is out on bail, also agreed to forfeit $2.2 million.
Braskem’s CEO from 2002 to 2008, Mr. Grubisich at first denied the charges brought by U.S. prosecutors in a three-count indictment filed at the time of his arrest at Kennedy International Airport in New York in November 2019. But in a February court filing, his lawyer said the executive was in discussions with prosecutors to settle the charges.
In a statement in court on Thursday, Mr. Grubisich admitted to knowing about and agreeing to pay bribes to an unnamed official at Brazil’s state-controlled Petróleo Brasileiro SA, or Petrobras, following a 2005 contract with Braskem to operate a polypropylene plant.
Mr. Grubisich, who is 64 and a Brazilian national, said he also agreed with others to create an off-the-books slush fund, called Caixa 2, and admitted to certifying Braskem’s 2006 and 2007 annual financial statements to the U.S. Securities and Exchange Commission, despite knowing that they inaccurately represented the company’s financial condition and the fraudulent conduct.
“I knew that all of this conduct was not lawful or correct, and I regret that I failed to fulfill my responsibilities as CEO,” said Mr. Grubisich, who appeared in court.
Mr. Grubisich’s lawyers, Paul Shechtman and Edward Kim, emphasized that the plea was to crimes that occurred in Brazil more than a decade ago.
“José Carlos was not the mastermind, but went along reluctantly with the corporate culture in Brazil at the time,” the lawyers said in a statement.
In 2016, Braskem and its parent company, Odebrecht SA, agreed to pay a combined penalty of at least $3.5 billion to authorities in the U.S., Brazil and Switzerland to resolve charges related to the bribery scheme.
In the U.S., both companies pleaded guilty to conspiring to violate an antibribery provision of the FCPA. In December, Odebrecht changed its name to Novonor.
Mr. Grubisich is scheduled to be sentenced in August.
Write to Dylan Tokar at [email protected]
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